Monday, August 14, 2006

Fox TV to sell on demand content on MySpace

The world of TV and movies over the internet just got a lot bigger. And Rupert Murdoch's abilities to monetize the enormous traffic on MySpace (over 100 million registered users) just got a lot clearer.

According to the Financial Times, MySpace (and other sites) are going to sell movies and TV shows on demand from Fox. The deal for customers is reminiscent of what Apple worked out for music and video on the iTunes store: Download to own, transferrable to portable devices, priced at $19.99 for a movie, $1.99 for a TV show.

Mickeleh's take:
  1. In general: This is part of an accelerating trend by corporations who control the rights to programs that people want to watch to route around the limits -- and negotiating clout-- of cable TV and satellite distribution. (see Shelly Palmer's Television Disrupted: The Transition from Network to Networked TV for the best 50,000 foot overview)
  2. Specifically: Don't be surprised that News Corp (parent of Fox, MySpace, and DirecTV) is by-passing DirecTV in this. The lack of a robust VOD capability is a big competitive disadvantage for satellite vs. cable. Here's one way to route around that. Combine these deals with DirecTV's active bidding for wireless spectrum, and a coherent and powerful strategy begins to emerge.
  3. As the big guys develop increasing presence in internet distribution, it's going to force video podcasts, vlogs, and user-generated content farther and farther down the long tail. (good thing there's plenty of room down there.)
Marshall Kirkpatric covers the Fox announcement today on TechCrunch.

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